Market environment and business development

      The High Performance Metals Division was confronted with different developments in the main product and customer segments. Global demand for tool steel from the automotive and consumer goods industries was weak. Special materials for the aerospace industry and the oil and gas sector provided positive momentum.

      The consumer goods industry is a key driver of demand for tool steel. This industry faced several challenges in the business year 2023/24. For example, sales of white goods (refrigerators, washing machines, etc.) are heavily dependent on the real estate sector, particularly new residential construction. This suffered from high interest rates in Europe and North America. The electronics sector was also subdued: While demand for mobile devices and computers boomed during the COVID-19 pandemic, momentum has since slowed. In contrast to the difficult conditions for tool steel, particularly in the standard-grade area, competitive pressure in the high-quality product segment was significantly lower.

      In terms of regional development, the tool steel product segment in Europe recorded a significant drop in demand for the business year 2023/24. In addition to the general weakness in toolmaking, car manufacturers also postponed the launch of new models. Weak demand and strong import pressure from Asia, particularly China, resulted in significant surplus capacity in Europe.

      In North America, there was reduced demand in toolmaking in the business year 2023/24. Demand for tool steel was also quite restrained in South America. Overall, there was little momentum in Asia from the consumer goods industry, the automotive supply industry, and the electronics industry. The situation in South East Asia in particular was very subdued. In China, there were initial signs in the fourth quarter of 2023/24 that the situation was gradually improving. Positive news came from India, where the business year 2023/24 saw a significant upward trend.

      There was tailwind for the special materials product segment from the aerospace and energy sectors. The aerospace sector benefited from the continued rise in passenger numbers. Regional air traffic had already recovered noticeably in the previous business year. Intercontinental air traffic also improved significantly in the business year 2023/24. Passenger volumes are thus back at the level they were at before the outbreak of the COVID-19 pandemic. These developments resulted in growing orders for passenger aircraft. In addition to long products and closed die-forged components, titanium sheet was also added to the product range.

      In addition to aerospace, the oil and gas sector also performed well and ensured good order intake in the High Performance Metals Division. Although economic conditions became more difficult in the business year 2023/24, numerous new projects were implemented in the area of oil exploration. Drilling activities varied from region to region. Active drilling fields (rig counts) declined in North America in the business year 2023/24, while they increased slightly in the Middle East, Africa, and Europe. Special materials were also required for the expansion of the LNG infrastructure.

      In the energy machinery customer segment, the European market for power plant turbines was buoyant. A slightly positive trend was recorded in wind energy, where the High Performance Metals Division supplies materials for key components. Demand from the truck industry remained at a high level, while orders from the agricultural machinery sector were somewhat weaker.

      The High Performance Metals Division’s production plants were not fully utilized in the business year 2023/24. This is due to the subdued global demand for tool steel, which could not be fully compensated by the good market for special materials.

      While the Villares Metals special steel plant in Brazil performed well and only experienced a slowdown towards the end of the business year, the European sites were unable to fully utilize their production capacities for practically the entire reporting period.

      The German special steel plant Buderus Edelstahl in Wetzlar, Germany, was confronted with the most difficult situation in the High Performance Metals Division. The product range of tool and engineering steels with a high proportion in the standard-grade area showed low demand on the European market, resulting in low capacity utilization of the production facilities. Combined with high energy costs in Germany, this led to the decision to turn the advanced process of strategic repositioning into a sales process for this plant.

      The Swedish special steel plant Uddeholms was also confronted with reduced capacity utilization for large parts of the business year, but has a better position in terms of energy costs compared to the rest of Europe.

      The new special steel plant in Kapfenberg, Austria, was commissioned in the business year 2023/24 and stepwise ramped up. This plant is considered to be the most modern plant in the world for the production of high-quality tool steel and special materials. The necessary certification processes, particularly for the aerospace and energy sectors, were positively initiated and largely implemented as planned in the reporting period.

      The Value Added Services business unit comprises the global sales and service network of the High Performance Metals Division. It supplies customers with high-quality tool steels and also offers services such as mechanical processing, heat treatment, and surface coating. In Europe, particularly in Germany, the division was faced with a decline in orders for tool steel. The situation in North America and Asia also declined, but was somewhat better. In contrast to tool steel, sales of materials for the aerospace industry and the oil and gas sector were very positive. Demand for services such as surface coating and texturing developed very well worldwide.